Demographics, financial inclusion, AI potential creating 'unprecedented growth tailwind' for India: Shaktikanta Das

The demographic dividend gives India a massive growth advantage, Das says.

• India's digital infrastructure and young workforce drive strong growth prospects
• Global trade shifts from hyper-globalisation to regionalisation, increasing costs
• Reforms and regulatory clean-up aim to boost business ease and employment

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India’s youthful demographics, "world-leading" digital public infrastructure, "deepening financial inclusion", and the technological and AI potential are creating a multiplier effect on the country’s growth and development, Shaktikanta Das, Principal Secretary to the Prime Minister, said on Friday.

Das said these factors are "aligning to create an unprecedented growth tailwind for India." He was speaking at the Inaugural 'Bibek Debroy Memorial Lecture' in New Delhi. At the same time, India’s commitment to fiscal prudence is restoring headroom for future counter-cyclical policies and helping keep public debt "sustainable", he added.

Das noted that today we stand at an "inflection point" where shifting geopolitical winds and trade policies are reshaping the global economic order. "Traditional multilateralism, once a cornerstone of global governance, is under severe strain. It is increasingly being sidelined by geopolitical rivalries, protectionism and fragmentation."

Trade and supply chains, once seen as neutral conduits of globalisation, are increasingly being utilised as instrumentalities of disruption and dominance, he said. "Reshoring and friend-shoring of supply chains, prioritising strategic alliances over global integration are fragmenting the global networks."

Das said that critical sectors like semiconductors, rare earths, energy and pharmaceuticals are now leveraged as tools of influence, exposing vulnerabilities, especially in dependent economies. "All these shifts have profound implications: global trade growth has slowed, supply chains are being realigned, and multilateral global order is becoming ineffective. The share of trade in global GDP has stagnated, signalling a shift from hyper-globalisation to regionalisation," he said, adding that at a certain level, these trends may result in rising costs and inefficiencies.

Recognising these realties, India’s stance in the changing world order is clear, he said. "India stands for a cooperative and rule-based global system; but at the same time, we are proactively forging partnerships and strategies to secure our national interest in a world where power is more diffused. We, of course, acknowledge that the multilateral system must be revitalised, even as we adapt to new alignments," Das added.

The decade ahead

"We may envision an India in ten years from now – (possessing) a young workforce highly skilled in digital tools; (conducting) seamless transactions and innovations on a world-class digital infrastructure; (witnessing) more and more economic activity getting formalised; and (leading) Indian-led innovations in AI, health, and space driving productivity gains," Das said.

On the workforce, Das said with a young and aspirational population, India will continue to have a growing workforce for years to come, even as other economies face aging and even shrinking workforces. "This demographic dividend gives India a massive growth advantage: a rising share of productive workers supporting relatively fewer dependents can supercharge economic output and savings."

"At the same time, it is clearly understood that a demographic dividend can't be on autopilot; it must be steered and its potential imaginatively harnessed," he added.

The PM’s Principal Secretary noted that the opening up of the space sector to private players has resulted in start-ups building satellites and launchers in India. "In biotechnology and pharma, India is already a global leader in generics and vaccines. We are now moving up the value chain into biosimilars, new drug research and advanced gene therapies. Our large and diverse genetic pool and disease profile make India an important place for medical innovation that can serve the world."

He adds: "The nuclear energy sector has also been opened up for private participation. The recently enacted SHANTI Act provides a vibrant framework for creating an energy secure India on a sustainable basis. All these technological leaps can have a multiplier effect across sectors."

'Continuity of structural reforms'

On reforms undertaken in the past decade, Das said that India’s stability and growth is a continuity of structural reforms that have been sustained over the past decade. During the last 10 years, the government has enacted and implemented several landmark reforms across taxation, financial architecture, labour regulations and business facilitation. "This continuity and consistency of reform momentum reflects our commitment to addressing long-standing bottlenecks and unleashing India’s full productive potential."

He highlighted GST, Insolvency and Bankruptcy Code (IBC), Real Estate (Regulation and Development) Act (RERA), flexible inflation targeting framework, four labour codes, the PLI scheme, National Infrastructure Pipeline (NIP), Gati-Shakti, Digital India mission, and Start-up India programme, as the key reforms, which are "game changers".

"In parallel, significant steps are being taken to promote ease of doing business and ease of living. During the past few years, over 40,000 unnecessary compliances and 1,500 archaic laws were scrapped or amended – a clean-up on an unprecedented scale," Das said.

In this direction, a High-Level Committee for Regulatory Reforms in the non-financial sector has been set up, he said. "The objective is to overhaul outdated laws, de-criminalise minor procedural offences, simplify compliance processes and thus create a more business-friendly regulatory environment that would support higher growth and employment."